In the next two or three years, a number of takeover opportunities would arise, Schumacher told Financial Times Deutschland.

"We want to build up significant cash reserves in order to be prepared for that."

Schumacher estimated that only five of the 15 companies currently making chips for mobile phones were likely to survive.

Infineon would invest mainly in companies that complemented its own portfolio. But the transactions were unlikely to be large-scale takeovers, he said.

"We don't believe in the really big deals," Schumacher said.

Integrating large companies used up too much energy and could mean that Infineon loses its place in the rapidly changing sector, he said.

"I can think of no example where something like that really worked in this sector."

Infineon is expecting to turn in a fourth-quarter profit in the three months to September, after being in loss for the first nine months of its business year.

Analysts are forecasting net profit of 260-420 million (302-487 million dollars) for the 12 months to September 2004 "and, at this juncture, I don't see any catastrophe that could prevent us from achieving that," Schumacher said.

Handelsblatt quoted company sources as saying that Infineon planned to treble sales by 2008 to 16-20 billion euros, a goal which analysts believe would only be reachable via acquisitions.

A company spokesman refused to comment on that information.

SPACE.WIRE